Car Dealer Tricks: Rewritten Contract/Backdating, Forgery and Sticker Price

Rewritten Contract/Backdating

A customer often won’t qualify for financing under the terms of the first purchase contract and may be required to increase a down payment, APR, etc. to qualify for a loan. Then the dealership has the customer sign a second contract with the new terms but backdates it with the date of the first contract, sticking the customer with financing charges for a period during which the contract wasn’t yet in effect. In addition to misrepresenting when the customer takes the obligation of the new contract, a backdated contract often violates the single document rule because another form, usually called “Acknowledgment of the Rewritten Contract,” has the actual date when the contract was signed. In addition, many customers aren’t informed that they may opt to cancel the contract and return the new vehicle and have the ,  and trade-in vehicle refunded, rather than signing a second contract with less favorable financing terms.

Forgery

Car dealers may forge the customers’ signatures on subsequent contracts that change the terms of the original signed contract in case the customer refuses to sign the new one. Among other commonly forged documents are: credit applications (with fraudulent representations about income, etc.), as well as buyer’s disclosure forms and guides in order to prevent buyers from reading their buyers’ rights and/or information that may cause them to reconsider their purchase decisions).

Sticker Price

The car code states that a dealership cannot sell a new vehicle for more than sticker price (also known as the manufacturer’s suggested retail price, or MSRP) unless there is a dealer addendum sticker disclosing itemized costs above MSRP physically affixed to the car. Inflating the cash price of a vehicle – as in the case of a negative equity deal often results in selling a vehicle for higher than the MSRP, while also affecting the amount charged for taxes, licensing & registration and finance charges.